M&A, mining rebound leads FTSE past 6,000

Corus, Aer Lingus shares hold investor attention

By

SarahTurner

LONDON (MarketWatch) - M&A speculation and a rebound in the commodities sector lifted stocks in London trading on Thursday, with markets taking in stride a decision from the Bank of England to leave interest rates on hold at 4.75%.

The central bank's decision to stand pat on rates for the second month in a row was as expected. See full story.

Corus
CGA, +0.59%
(CS) stood in London's Thursday spotlight, its shares rallying as word emerged that Tata Steel, India's top private steelmaker, is considering a takeover bid for the Anglo-Dutch group. See full story.

Corus shares ended up 16.3%, its best level since August, on nearly twice as much volume as usual.

London's top index, the FTSE 100 (UKX) rose 0.6%, or 38 points, at 6,004. It was the first time it's closed above 6,000 since May.

Not surprisingly following the Bank of England's rate decision to hold rates steady, stocks traditionally sensitive to interest-rates moves, such as mortgage banks Alliance & Leicester (AL) and Bradford & Bingley (BB), and home builders such as George Wimpey (WMPY) and Barrett Developments (BDEV), were little changed.

Ryanair said it has acquired more than 16% of the shares of Aer Lingus, which listed on the Dublin and London stock markets just at the end of September.

Ryanair's offer is at a roughly 27% premium over the initial public offering price of 2.20 euros. Shares of Ryanair eased 1%. See full story.

Still in the airline sector, British Airways (BAY)
BAB, +0.03%
saw its shares lose 1.8% after Citigroup downgraded the carrier to hold from buy, citing lighter-than-expected September traffic and the firm's reduced revenue target for fiscal 2007.

Citigroup also said that a pilots strike over pensions changes cannot be ruled out but that the Airbus A380 delay is positive, because of the effect it has on competitive capacity.

Outside the top index, UKbetting (UKB) shares surged 10.8% to 61.5 pence after saying it has received preliminary takeover approaches, though they may not lead to a formal takeover offer.

The Daily Telegraph newspaper reported UKbetting's hired UBS to evaluate approaches, though the newspaper didn't identify who was bidding for the company, which owns a network of popular sports-content Web sites.

And shares of communications-technology company Spirent Communications (SPT) gained 11.5%. It said current trading is in line with expectations after it won new customers. The company also unveiled plans to seek a U.S. delisting and return an additional 50 million pounds in capital to shareholders.

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